In today’s global landscape, Romania emerges as a prime location for international companies seeking expansion opportunities within Eastern Europe. With its long-awaited full Schengen Area accession, effective January 1st, 2025, Romania has strengthened its role as a central logistics hub, offering seamless movement of goods across all routes - air, sea, and land. This facilitates shorter transportation times and smoother trade flows, further enhancing Romania's attractiveness for global investments.

WHAT SETS ROMANIA APART

Its strategic location at the crossroads of Europe, a rapidly growing economy, and a favorable business climate makes Romania an ideal environment for both office and industrial sector investments. Competitive labor costs, high productivity, multilingual and tech-savvy employees, and a rapidly modernizing infrastructure make Romania an attractive destination for businesses looking to establish a presence in the region, whether for industrial or office facilities.

Romania has a lot to offer, though a few challenges still exist. They're relatively minor, and we'll take a closer look at them shortly.

PRIME NEARSHORING AND FRIENDSHORING DESTINATION IN EUROPE

As companies continue shifting from globalization to regionalization, Romania’s proximity to Western Europe presents opportunities to bring production closer to such key markets within a country with a stable environment. This makes it an ideal location for expanding logistics and production facilities, enabling businesses to build resilient, efficient supply chains that reduce delivery times, costs.

Strategic Location and Geo-Political Integration

• Romania’s geographic location in Central and Eastern Europe makes it a strategic gateway between Western Europe, the Balkans, and the Middle East.
• Since joining NATO in 2004, the country has enjoyed increased security and stability.
• Its integration into the European Union in 2007 has further aligned its regulations and business practices with EU standards, creating a dependable and transparent environment for investors, and providing access to a market of over 500 million consumers.
• Romania benefits from a major port on the Black Sea, in Constanta, of 3 Pan-European corridors, and several international airports.
• Bucharest, the capital, is just a three-hour flight from most major European cities.

MAJOR ADVANCEMENTS IN ROAD AND RAIL INFRASTRUCTURE

Romania's road and rail infrastructure, once lagging in competitiveness, has seen substantial progress in recent years, largely driven by over €28 billion in EU funding through the National Recovery and Resilience Facility (PNRR). This funding supports critical areas like infrastructure, green energy, digitalization, and social inclusion.

Highways: Romania features approximately 1,280 km of high-speed roads, with 197 km added in 2024 alone. Other 250 km are scheduled for completion in 2025, from a total of over 700 km of new highways that are under construction. This includes the A7 Moldova Highway, which aims to connect Romania's economically underdeveloped eastern regions to the rest of the country and the Port of Constanța. About 33% of the 320-km highway has already been completed.

Railroads: Significant modernization is also underway in Romania's rail network. Projects include upgrading 162 km of track to support speeds of up to 160 km/h and reconstructing 66 platforms across 13 stations to meet EU accessibility and interoperability standards. These initiatives align with broader European goals for sustainable, efficient, and integrated passenger and freight transportation.

Pan-European Corridors. Romania is traversed by three several pan-European transport corridors, namely:

1. Corridor IV – Connecting Dresden (Germany) to Istanbul (Turkey), key route for both freight and passenger traffic
2. Corridor IX – Running from Helsinki (Finland) to Alexandria (Greece), important for both road and rail traffic
3. Corridor VII – The Danube River corridor, connecting the Black Sea to the river’s source in Germany

The Danube River, a vital waterway connecting 10 European countries and spanning Romania’s southern border, remains underutilized economically. To unlock its potential, the European Union, in collaboration with the Danube Commission in Budapest, is working to enhance the river’s efficiency and foster economic growth in riparian areas.

This comprehensive development positions Romania to enhance its connectivity, economic growth, and integration into European infrastructure networks.

RELATIVELY STABLE ECONOMY

With a resident population of approximately 19 million, Romania is the second largest country in Eastern Europe, therefore attractive both from a consumer market perspective, and a labor force one. The country’s economic evolution is driven by increased foreign direct investments, a growing middle class, and significant advancements in infrastructure.

Over the past decade, Romania's GDP has demonstrated consistent growth, regularly surpassing the average increases seen across the European Union (EU), slightly decreased after pandemic. In 2023, the real GDP growth reached 2,1% driven by diverse sectors including manufacturing, technology, and services, while in 2024 it is expected to sightly decrease to 1,8%, lower than the 3% forecasted level, but significantly higher further compared to other European markets.

With a skilled labor force and a competitive tax system, including one of the EU's lowest corporate tax rates at 16% and a VAT of 19%, Romania stands out as a prime destination for business investments. Labor costs in Romania are among the lowest in the EU, offering companies a competitive edge. The average gross monthly wage in the industrial sector is about €850, significantly lower than in Western Europe.

Some eastern regions face higher unemployment rates, but ongoing infrastructure projects and substantial investments are transforming these areas. With new industrial developments taking shape, these regions are becoming increasingly attractive for investment and job creation.

POLITICAL PULSE

2024 was a politically turbulent year, marked by three rounds of elections—European Parliament, presidential, and local elections—from spring to winter. In recent years, extremist and populist voices have gained more traction, largely due to the authorities' failure to consistently enforce the existing legal framework.

Romania continues to maintain a stable, pro-European political environment, effectively resisting external interference, such as the attempts observed during the presidential election process in December 2024. While awaiting further clarification from state institutions, the majority of the population and the business community support the Constitutional Court’s decision to reschedule the presidential elections, now confirmed for May 4th and 18th, 2025.

After the December 2024 elections, Romania formed a pro-EU, pro-Western coalition government, which included the two main parties of the former socialist-liberal coalition.

After the presidential elections in May 2025 and continuing until 2030, a more optimistic long-term outlook emerges. The absence of elections during this period provides a favorable environment for implementing necessary reforms, which, though less popular, are long-needed and expected to take place in the latter part of this year.

The Romanian government has implemented several measures to simplify administrative procedures and encourage foreign direct investment.

INDUSTRIAL MARKET OUTLOOK

Romania’s industrial and logistics sector has experienced significant growth over the past decade, reaching a total stock of 7,5 mil sqm modern industrial space in 2024. Major hubs are in in Bucharest (45% of the country’s stock) Cluj-Napoca, Timișoara, and Constanța.

The vacancy rate stands at around 5.6%, reflecting a healthy balance between supply and demand. This moderate vacancy rate indicates a dynamic market with room for new investments without the risk of oversupply.

Romania boasts over 210 industrial parks, offering ready-to-use facilities and essential infrastructure. These parks offer significant advantages such as tax exemptions, access to utilities, and proximity to major transport hubs. The government also provides incentives for industrial investors, including state aid schemes, grants for job creation, and subsidies for training and research and development. On February 23, 2023, the government established the Romanian Agency for Investment and Foreign Trade (ARICE) as a new lead agency to promote and facilitate foreign investment.

Headline rents in Romania are competitive compared to other European markets. In Bucharest, the prime headline rent for industrial space is around €4.5–€4.8 per square meter per month, while in secondary cities, rents range between €4.2 to €4.5 per square meter per month. These rates are attractive for companies looking to optimize operational costs while maintaining access to high-quality facilities. Newly built warehouses feature A-class characteristics, including increased clear height for racking storage, five tons per square meter floor loading, energy-efficient systems that translate into lower utilities costs for the tenants, medical & accommodation services on-site, and LED lighting. For built-to-suit (BTS) projects, features are adapted to client’s needs and all above standard technical improvements (ASTI) are accommodated as per the request, seeing as production units are becoming more common in the country. Lease agreements are typically signed for a five-year term, with landlords offering incentives such as 3-5 months rent-free periods, early access for setup, relocation costs covered by landlord, or furnishing costs included. The service charge is currently around €1.00 per square meter per month.

Romania presents a significant opportunity for further growth in the industrial and logistics sector compared to its regional peers. As of 2024, Romania had approximately 7.5 million sqm of such space, equating to only 0.39 sqm per capita—noticeably lower than Poland’s 0.88 sqm/capita, the Czech Republic’s 1.1 sqm, or even Hungary’s 0.52 sqm.

Another perspective for further development and attracting new companies with an Industrial & Manufacturing profile is the quality of new industrial parks. The CEE-6 region, of which Romania is a part, is a leader in the implementation of ESG standards, with almost 90% of modern industrial and logistics spaces having high-quality environmental certifications.

CASE STUDIES

Several multinational companies have successfully established their operations in Romania, benefiting from the country's favorable business environment. For example:

1. Daimler: The German automotive giant invested €300 million in its Romanian subsidiary, Star Assembly, located in Sebeș. This investment facilitated the production of the 9G-Tronic automatic transmission.
2. Continental: Continental has expanded its research and development activities in Romania, with approximately 4,000 employees across its R&D centers in Iași, Sibiu, and Timișoara.
3. Pirelli: The Italian tire manufacturer has been operating in Slatina, Romania, since 2006. The facility is recognized as one of the world's most modern plants for manufacturing high-performance tires.
4. Nokian Tyres: The Finnish company is constructing the world's first zero CO2 emission tire factory in Oradea, Romania. The facility is set to commence commercial production in early 2025 with a 650 million Euro investment.
5. Michelin: Present in Romania since 2001, Michelin employs over 4,500 people across three factories—two in Zalău and one in Florești. In 2018, Bucharest became the coordination center for the company's operations in Central Europe and Central Asia, covering 30 countries.

Romania is also home to a range of retail and production units from companies such as Delhaize, Auchan, LPP, Carrefour, Rewe, and manufacturers like Arctic, Ursus/Asahi, JTI, and BAT. These positive examples prove, once again, why Romania is an attractive destination for diverse industries.

OFFICE MARKET SUMMARY

Romania's office market has experienced steady growth, with Bucharest's modern office stock now surpassing 3.5 million square meters. Nearly half of this space was developed in the past decade, ensuring high-quality standards that make it highly competitive compared to other European capitals.

The country’s appeal is driven by its outstanding internet infrastructure (ranking 11th globally in terms of fixed broadband internet speed) and a highly capable workforce, particularly in engineering and IT, where many professionals are bilingual or trilingual, with English widely spoken.

This talent pool has been instrumental in shaping the office market, with the IT&C sector historically accounting for up to 50% of annual office leasing transactions before the pandemic. Although this share has recently stabilized at 30-35%, IT&C remains the leading driver of the office market.

By August 2023, the IT&C sector employed 240,800 individuals, the majority of whom are young professionals under 34 years old. Major industry players such as Oracle, Microsoft, IBM and Amazon have long recognized Romania's potential, while recent entrants like Booking and Ford have also made the country their IT home. Additionally, as AI advancements reshape the IT market, the anticipated workforce shift is expected to create new opportunities by making experienced specialists available for other industries.

Class A office rents in these cities range from €14–18/sqm, with service charges between €3.5–4.5/sqm. Lease terms are generally five years.

The country is also an appealing destination for digital nomads, offering low taxes, affordable living costs, and the option to gain tax residency after six months. Additionally, real estate costs are significantly lower than in other European countries, while university hubs in cities like Bucharest, Cluj-Napoca, Timisoara, and Iasi attract a steady stream of talented young people.

PROSPECTS

Romania’s industrial sector is poised for further growth, driven by ongoing infrastructure improvements and increasing foreign direct investment (FDI). According to EY’s latest attractiveness report, the favorable outlook is recognized by 67% of investors, who anticipate an increase in Romania's attractiveness as an investment destination over the next three years.

Romania stands out by surpassing Greece and Bulgaria in the number of FDI projects and by ranking fifth in Central and Eastern Europe in terms of the average number of jobs created per project. Access to non-reimbursable financing is considered a key factor by 72% of investors. Sectors of interest include software and IT services, electronic products, transportation, and logistics, which dominate in attracting foreign direct investments.

WHY COME TO ROMANIA?

Romania stands at the crossroads of opportunity, offering a prime strategic location, competitive costs, and a business-friendly environment, making it an ideal destination for both industrial and office sector growth. With ongoing infrastructure enhancements, a highly skilled workforce, and strong government support, Romania is well-equipped to meet the demands of businesses looking to expand in Europe.

Now is the perfect time to tap into Romania's investment potential. Join the growing number of global companies already flourishing here.